South Africa’s 2012-13 Budget Deficit May be Under 5%

April 2 (Bloomberg) -- South Africa’s fiscal deficit may
fall below 5 percent of gross domestic product in the fiscal
year that ended March 31, Finance Minister Pravin Gordhan said.

The South African Revenue Service collected 814 billion
rand ($88.4 billion) of taxes in the year, more than an estimate
of 810.5 billion rand, Gordhan told reporters in Pretoria today.
The budget gap is estimated at 5.1 percent, down from a February
projection of 5.2 percent, though it may be lower than that if
the government spends less than forecast, he said.

“Getting 4 billion rand extra in the current circumstance
is a remarkable achievement,” Gordhan said. “The combination
of extra revenue and some areas of underspending is likely to
take our deficit below 5 percent.”

Gordhan has been forced to scale back his revenue
projections as mining strikes and a drop in demand from Europe
cut exports, curbing growth in Africa’s biggest economy. The
government plans to narrow the budget gap to 3.1 percent of GDP
in the fiscal year ending in March 2016 from an estimated 4.6
percent this year.

South Africa plans to cut spending for the next three years
as it faces downgrades from Standard & Poors and Moody’s
Investors Service. Elections next year will put pressure on
President Jacob Zuma to raise social spending, limiting
Gordhan’s ability to tighten the gap quickly enough, according
to S&P and Moody’s.

The rand fell 0.2 percent to 9.2087 against the dollar as
of 3 p.m. in Johannesburg, taking its decline this year to 8
percent.